The market for organic products in the Russian Federation in the coming years will grow by 10-12% – experts

The market for organic products in the Russian Federation in the coming years will grow by 10-12% – experts

The market for organic products in the Russian Federation in the coming years will grow by 10-12% - experts

The Center for Industry Expertise of the Russian Agricultural Bank predicts that in Russia the growth rate of the market for organic products will amount to 10-12% per year in the coming years.

“The Russian organic market is at the very beginning of its development. According to the Center, the share of organic products in the Russian food market is about 0.1% – with sales of organic products of about 10 billion rubles and a total capacity of the food market of 10 trillion rubles.” – said the head of the Center Andrey Dalnov, quoted by the bank's press service.

Currently, the Russian organic consumer market is dominated by imported products, the share of which, according to various estimates, is 80-90%. Russian manufacturers are still working more in the b2b segment, a significant part of the products are exported. The transition to an organic production model is usually accompanied by an increase in costs and a decrease in productivity.

According to the Center, this model is most promising in those segments of the agro-industrial complex that are largely integrated into international trade and already interact with markets where organic products are in great demand. Another important factor that determines the predisposition of a particular segment to switch to organic production is the proportion of competitive farms and small organizations that have sufficient flexibility in changing the production process.

As Dalnov notes, the greatest potential for the development of organic production is possessed by farms that produce grain, oilseeds, and legumes. Among specific crops, Russian organic wheat, green peas, soybeans, buckwheat are in demand. The effect of a low base is also of some importance – only 0.3% of arable land in the Russian Federation is used for organic production. In the EU, this figure is about 10%.

According to experts, there is a high potential for growth in the production of organic products in open field vegetable growing.

In animal husbandry, the most promising area is dairy farming. This is one of the segments of the Russian agro-industrial complex, where farms are the most competitive and mobile enough to meet the growing demand for organic products, experts say. At the same time, due to the high concentration in pig and broiler poultry farming, the prospects for the development of organic production are limited.

According to the Institute for Research of Organic Agriculture (FiBL), the current global organic market is $ 100 billion. By 2024, this figure is projected to double. The United States occupies 50% of the world market for organic products, the EU countries – 35%, China – about 10%. Australia, Canada, Japan, Switzerland also stand out in terms of the volume of the domestic market.

As a rule, in developed organic markets, its share in the retail food trade does not exceed 5-6%. The exceptions are Switzerland and Denmark, where the figure is around 10%.

Rosselkhozbank, established in 2000, belongs to the state and is the main lender of the agro-industrial complex. According to the results of the 2nd quarter of 2020, it ranks 5th in terms of assets in the Interfax-100 ranking, prepared by Interfax-CEA.

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